Will Covid-19 be the springboard for Human-less Retail?

Will Covid-19 be the springboard for Human-less Retail?

With many countries around the world still in lockdown due to the Covid-19 pandemic, a lot of my focus this month has been in helping my retail clients to find new ways to cope and (in some cases) meet the increase in e-commerce demand. It would be wrong to write an article without a nod to the challenges that are being faced head-on right now.

Naturally, there have been varying impacts on different sectors. For those providing food and household essentials, current trading is more tsunami than downturn as retailers scramble to meet spikes in demand. To respond to these needs and comply with current fulfilment restrictions, these retailers are having to stretch their supply chain and augment their fulfilment network.

For Apparel/Fashion and mall-based retailers, essentially, the Spring selling season is already lost, and probably a third-to-half of summer also. Lengthy product development and production calendars will likely impact Autumn/Winter 2020, if not beyond.

While I work to support the needs of my MENA clients and their customers, we must recognise and absorb the lessons and learnings of this global pandemic. We must also look beyond the current phase we are going through, consider if and how retail might change, what will be of relevance and value, and what organisations are in a position to respond.

State of MarTech Report

One thing that will have a renewed focus will be human-less retail. Even before the impact of Covid-19, my attention had been brought to offerings like that of Stockwell. Stockwell, a company I believe, is well-positioned to succeed and even more so in a post Covid-19 world.

Stockwell is a retail technology company that builds and operates smart stores that stock convenience store items like soft drinks, aspirin or health food bars. These stores come in the form of the unmanned vending machine located where there is relevant passing footfall, for example, apartment buildings, gyms and offices.

Each shelf is modular, and Stockwell can build any form factor that they want by stacking the shelves. Customers engage and make payment for the products they purchase via their Stockwell app account. Stockwell’s offering brings the convenience of modern retail to the locations where people live, work, and play. But when you see it in the cold light of day, you are provoked to ask whether it is more than just a glamourous vending machine.

Beyond the aesthetics, what makes it smart and gives it a unique proposition is that the merchandise is tailored to the individual needs of the location and the customers. It continues to evolve based on buying behaviours and customer feedback.

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Stockwell uses a combination of mobile app and computer vision, a la Amazon Go, to keep track of what you take from it and charge you accordingly. Stockwell then analyses the sales data from the physical unit and gathers feedback and preferences from the store’s customers (via the app).

Over time, the product selection of the store evolves based on what people buy, new item requests made, and product reviews, etc. resulting in a store that reflects the unique needs of every location.

Despite a shaky organisational start and a hasty rebranding (the company was originally named ‘Bedoga’), the startup has continued to attract investment and managed to open 1,000 kiosks all across the USA, including in major markets like the Los Angeles, Houston and Chicago metro areas.

In the US, Byte has been doing something similar with smart fridges, and lunches for offices and Briggo was installing fully automated, robotic brewing machine that can push out 100 cups of coffee in an hour to make grabbing a latte on the go a little easier. BingoBox store in Shanghai, one of more than 200 outlets across China, has no cash registers, checkout lanes, or store assistants. Colourful snacks line the shelves, customers enter the store with a QR code, pick up what they need, scan the barcode of their products, and leave the store.

With Covid-19 affecting all our lives (at the time of writing), we have to reconfigure our lives around new constraints with quarantine lockdowns a daily reality. Human-less and cashless retail offerings like Stockwell’s can have a heightened value at this time.

Of course, human-less retail isn’t appropriate for all retail categories, especially where the product is more complex or where a curated experience is sought. However, with convenience products where the outcomes are predictable, people appreciate an effortless experience.

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The economics of human-less convenience stores also make perfect sense on paper. Automating inventory management, cashiering, and cash counting can improve productivity by more than 50%. Having access to vast troves of consumer data enables the retailers to optimise for merchandise range, mix, and product displays.

Stockwell fits well within this emerging trend and is the only one of my named examples where the value proposition is enhanced in the occurrence of a pandemic.

With close to 500,000 apartments in Dubai, having a selection of convenience store items in the building lobby curated to the needs of the building’s population would be highly attractive at any time. This idea also works with the aesthetic of Dubai. Each store has been designed like a piece of furniture so that the property owners or managers are willing to put it in high traffic areas. And with Covid-19, it would be a welcome addition in a period where there is a mandated need to reduce, if not sever, physical human contact outside of our household.

When life does get back to normal, there are also growth opportunities for Stockwell. As an example, they could partner with groups like Airbnb. US company Qvie has already debuted a tiny vending system for Airbnb hosts, but having a micro-convenience store for things that travellers left at home or a curated selection of local packaged foods they should try would be very attractive.

This would be a nice add-on for Stockwell and a potential additional revenue source for hosts but won’t make or break the model. To be viable in the long-term, unmanned convenience stores like Stockwell will still need to nail the fundamentals of retail: convenience, but also superior customer experience, as well as the ability to realise the cost savings that justify widespread deployment.

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